Asian stocks mixed as Trump impact weighed; dollar firm before Fed decision
By Kevin Buckland
TOKYO, Nov 7 (Reuters) -Asia-Pacific equity markets were mixed on Thursday as investors weighed the implications of a Donald Trump presidency, while also eyeing monetary policy decisions from the U.S. Federal Reserve and other major central banks later in the day.
Though potential for a Republican sweep quickly ushering in big fiscal spending sent all three major U.S. share indexes surging to record peaks, strong gains were not seen in Asia.
U.S. Treasury yields soared on the risk of higher deficits, helping lift the dollar to its biggest one-day gain in more than two years versus major peers on Wednesday.
The euro was under additional pressure after German Chancellor Olaf Scholz sacked his Finance Minister Christian Lindner, causing the ruling three-party coalition to collapse.
The mixed reaction for Asian stocks was underscored in Japan as the tech-heavy Nikkei 225 .N225 reversed initial gains to be down 0.44% at 39,308.55 as of 0217 GMT, while the broader Topix .TOPX remained up 0.88%.
Elevated bond yields - with the 10-year U.S. Treasury yield US10YT=RR at 4.4236%, hovering close to Wednesday's four-month peak of 4.4790%, and equivalent-maturity Japanese government bond yields JP10YTN=JBTC rising to 1% for the first time in three months - buoyed shares of Japanese banks and insurers, but weighed on tech names and other growth stocks.
"In this highly volatile period, you have to be very selective in Japan," said Frank Benzimra, head of Asia equity strategy at Societe Generale, adding that the Nikkei looks overextended.
"When we have the Nikkei at this level, I feel very uncomfortable."
Elsewhere, South Korea's Kospi .KS11 edged down 0.14%, while Australia's equity benchmark .AXJO slipped 0.24%, hurt by weakness in gold stocks after bullion slumped against a strengthening dollar.
Chinese markets, which lost ground on Wednesday due to the likelihood of higher tariffs under another Trump presidency, rebounded in the latest session. Hong Kong's Hang Seng .HSI rose 0.49% and mainland blue chips .CSI300 added 0.14%.
China's week-long National People's Congress Standing Committee meeting concludes on Friday, and market participants are keen for any fresh details on stimulus measures.
Chinese trade data released Thursday showed outbound shipments grew at the fastest pace in over two years in October as manufacturers rushed inventory to major export markets in anticipation of further tariffs from the U.S. and the European Union.
Weakness in some equity markets, including China and Europe, may be a product of investors flocking into U.S. assets, said Chris Weston, head of research at Pepperstone.
U.S. stock futures were overall flat to slightly higher on Thursday.
Pan-European STOXX 50 futures STXEc1 edged down 0.04%, although German DAX futures FDXc1 added 0.1%, following a 1.1% slide on Wednesday.
German Chancellor Scholz is seeking support from the opposition conservatives in passing the budget and boosting military spending, after the falling out with the Free Democrats party. The leader of the Conservatives, which are far ahead in opinion polls, is due to respond in a news conference later in the day.
The euro EUR=EBS was little changed at $1.0733 following its worst one-day slump since March 2020 on Wednesday, when it dived 1.82%.
The dollar index =USD, which measures the currency against the euro and five other major peers, was steady at 105.04, after jumping 1.53% in the previous session, the most since September 2022.
The greenback slipped 0.16% to 154.36 yen, following a 2% rally overnight.
While markets 0#FF: were still confident the Fed would cut interest rates by 25 basis points at the close of its two-day meeting on Thursday FEDWATCH, they slightly reduced bets on further easing in December.
Trump's proposed tariffs and immigration policies risk stoking inflation, which would slow the path of Fed policy easing.
"The big challenge for markets is that if you do see tariffs come through you need to balance the short-term nature of inflation risks with the medium-term aspect of lower growth," said Justin Onuekwusi, chief investment officer at investment firm St. James's Place.
"The market appears to be thinking about inflation right now."
The Bank of England is likely to cut interest rates by a quarter point on Thursday for only the second time since 2020 but the big question for investors is whether the BoE sends a signal about its subsequent moves after the government's inflation-raising budget.
Sterling GBP=D3 rose 0.28% to $1.2915, following a 1.24% slide on Wednesday.
Sweden's Riksbank is also expected to cut rates on Thursday, with most economists predicting a half-point reduction. Norway's central bank is expected to keep policy steady.
Bitcoin BTC= caught its breath on Thursday, easing 1% to $75,200, following its vault to a record high $76,499.99 overnight. Trump is seen as actively supportive of cryptocurrencies.
Gold XAU= remained weak following Wednesday's more than 3% tumble, edging down to $2,657.58. However, that was still not far from its recent record peak of $2,790.15.
Crude also succumbed to dollar strength on Wednesday, but clawed back some losses on Thursday, supported by risks to oil supply from a Trump presidency and a hurricane building in the Gulf Coast. O/R
Brent crude oil futures LCOc1 rose 0.35% to $75.18 per barrel. U.S. West Texas Intermediate (WTI) crude CLc1 gained 0.22% to $71.85.
World FX rates YTD http://tmsnrt.rs/2egbfVh
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Kevin Buckland; Editing by Edwina Gibbs
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
